It wasn’t supposed to be this way. Craig Whyte would not have expected Champions League football when he worked on the deal to buy Rangers last spring, but, by his own admission, income from the Europa League group stage was in the budget.
Winning the league came as a surprise late in the process and may have fuelled some summer transfer bids but income was about to fall well below expectations. Ally McCoist won only one game in four cup competitions, against Arbroath, season ticket sales didn’t bounce and with no serious income streams open, Rangers were set for a seriously low income season.
In addition, the injury to Steven Naismith robbed Rangers of what I understand would have been a £5m sale in January.
People have tried to assert that Whyte’s plan for Rangers was to liquidate the company all along, this is clearly not the case. Rangers were moribund while the First Tier Tribunal (FTT) was yet to report but Whyte planned to run the company, without reverting to administration until and perhaps beyond then.
As well as having to deal with the income shocks resulting from multiple on-field failures, Rangers were hit with an expenditure shock. The FTT was delayed from November to January. If it had proceeded as planned in November it would have reported in January. The delay was crucial, Rangers were going to spend a lot more money before the verdict was announced.
If the verdict arrived as expected in January, and Rangers won, it was game on. They would have been in a position to borrow like any other club and could have raised fresh share capital. There would have been no administration. This was the preferred outcome, Whyte would have emerged with his reputation intact and with a valuable football franchise for the outlay of exactly £1.
If they lost, Whyte could have presented a fait-accompli to the world.
He could have explained to the Rangers support that the total tax liability was “likely to be around £75m” and that there was no point putting fresh investment into a black hole, which was inevitably going to lead to liquidation – all for misdemeanours that occurred before his time. The support would have been distressed at the death of their history, but, crucially, they would not have blamed Whyte, whose reputation would still be intact.
He would immediately have applied for the 10 day grace period to consider appointing an administrator and used that time to tell the SPL and SFA that he could re-emerge with Newco FC within days and allow the league programme to complete as normal. He had security over the stadium, would be in a position to re-employ the players and would be able to honour financial commitments to other clubs, while securing the television and sponsorship contracts.
Public sympathy would have been behind him, Sir David Murray would have carried the blame (perhaps correctly) and I believe only Celtic would have voted against him. Newco would have been back in the SPL and, if the Daily Record’s reporting of Whyte’s thoughts on penalties are anything to go by, he expected to be docked a comfortable 25 points.
HMRC forcing Rangers into administration this month created enormous problems. Administrators Duff and Phelps are now in control and opened the club’s finances up to scrutiny.
As soon as it became evident that he securitised season ticket money from future years, three days after buying the club, placing the money into his own bank account, not that of the football club, Craig Whyte’s methods were subject to derision and outright disgust from many angles, most importantly from the Rangers support.
As things stand, Whyte cannot slip away. He has to stand with Ticketus, who will hold a security on Ibrox through one of Whyte’s companies, and he stands to gain an enormous amount of money for a year’s hard work. Ticketus are also in for the long haul, they have coughed up over £20m and will need a sizeable commercial return.
Many observers have noted that this has not progressed as a normal administration. It’s not a normal administration. The secured creditors (Craig Whyte and Ticketus) need to sell a lot of tickets beyond administration, either as Rangers, if they are successful in the FTT, or as Newco, if they lose the FTT. Selling a lot of tickets is a really tough challenge right now and will be made considerably more difficult if there are swingeing cuts made to the club staff and infrastructure now. Their interests are considerably best served by keeping Rangers as buoyant as possible.
Even if they manage to feed enough cash to the administrators to keep Rangers playing football until the verdict is delivered, the opportunity to present the league with a fait-accompli has gone. Everyone expects Rangers to fold and will have been busy working on a contingency plan.
Any goodwill that Whyte hoped to harvest has also gone, he is seen as a pariah, without friends within the game, in the political world, the media or the Rangers support. When he looks to build a consensus, there will be no advocates for his position. Quite the opposite, people want rid of him.
The on-going police enquiry and his interesting relationships with the Insolvency Service and HMRC will only cloud matters further. For all the bluster on these subjects, no one has been able to explain to me any illegal activities, in fact, most of the illegal activity he has been accused of are either perfectly legal or simply did not take place as described, but there is enough potential in this mix for many years of civil legal challenge, if not more serious issues.
Whyte and Ticketus now have decisions to make on how much extra skin to invest. Ticketus are in the game for a lot of money already and will be keen to protect their cash. It remains to be seen how much cash Whyte has in the client account at Collyer Bristow, but it’s clear that between them, Ticketus and Whyte were prepared to guarantee the administrators full wages and costs for the club for February.
The fact that the tap has been turned on 100% for the last two weeks suggests they have enough cash to run at a lower percentage for a while yet. Duff and Phelps will know how much money is available and will have an expected date for the verdict. It would be enormously bad judgement if they exhausted cash reserves before the verdict arrived.
As long as Ticketus investors hold their nerve, and the police don’t spike the process, Rangers will survive until the verdict. If they lose the verdict, and all expectations are that they will, what are we looking at?
As I said above, Whyte’s chance of presenting a fait-accompli has gone. He would need to go for a prepack liquidation but there are likely to be legal challenges to him making off with the assets of Rangers. At best, this would delay him for anything between weeks and years. Any police involvement would make matters even more difficult. If a negative verdict is delivered anytime soon, Rangers will cease.
Even if this happens, Whyte will still owe Ticketus a lot of money and will try to phoenix as a Newco. He will have the stadium and will be in pole position to apply for membership to the SPL or Scottish Football League.
A route back into the SPL in these circumstances would be difficult to achieve. The SPL board have the authority to accept a club into the league but I hear it is likely that, due to the importance of the matter, they would refer the decision to a vote of the entire league. Back in October I thought the fait-accompli was certain to be voted into the SPL, now I can’t see a Newco being voted in.
You would expect an application into the Scottish Football League to be accepted but there may be a rival bid. The ‘Blue Knights’ bid would not include Ibrox but have a number of options. They could ask to rent Hampden or Firhill, or could adopt a struggling lower league club, like Clyde. These notions are likely to be progressed but establishing a new club, without players or a stadium, would be an enormous challenge.
All of this would play out against a great deal of uncertainty. Whyte’s ability to sell tickets to Rangers fans must be in doubt. If a rival club wanted back into Ibrox in the future they would need to give the ultimate floating charge holder – Ticketus – the same kind of return Whyte has committed to. There is also the possibility of a lot more to come out about the old regime at Rangers, some of whom are behind the Blue Knights bid.
Even if someone gets a phoenix off the ground at Ibrox, keeping it alive will be difficult. The cost of running football games there every second week is considerable. Doing so, while repaying Ticketus, and competing against lower league (or SPL) opposition, will cut any football budget to levels not known in 30 years.
For now, everyone connected with Rangers needs to make confident noises but even if they die, their ghost is already in enormous peril.
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Gordon_J backing Neil Lennon on 1 March, 2012 at 21:30:
Meant to post earlier but fell asleep…
Happy Birthday…:)
Keep the Faith!
Hail Hail!
TONYG on 1 March, 2012 at 21:58 said:
What about Half Baked on the new crest?
Rico
Or Oven Ready?
No Readies?
Does anyone else find that their Rangers supporting colleagues at work seem to have taken a vow of silence since all of this became real for them. The Celtic supporters at work could talk about this all day but they sit and say absolutely nothing. Nothing.
Evening all,
great stuff from Paul67 and JF today. Wrt to the latest tweets from Phil Mac re the badge, this from the BBC site on 16th Feb (Ten fings u nevah new aboot etc…) takes on more substance:
6) Would a ‘new’ Rangers have to change their badge?
The only rule on this point as far as the SFA are concerned is that any club seeking to join the association cannot use the badge of an existing member.
A ‘new’ Rangers would need to apply for the vacant membership of both the Scottish FA and the SPL. Use of the badge would depend on who owns the rights and would be something for the new club to reach agreement on.
http://www.bbc.co.uk/sport/0/scotland/17043153 for full article.
Reading it in the light of Phil’s info, it would seem that the writers had already heard of this scenario…hence them giving what seemed at the time to be an arcane query disproportionate prominence.
Paul67 and James Forrest……..2 awesome posts today…….my hat doffed to both of you guys for summing up exactly what most of us would love to say. We think it , but you guys really have a gift for putting your thoughts into words.
The fact that this is all but a hobby for the 2 of you is even more alarming when you think of the salaries the laptop loyal are pulling down for a fraction of your talent, insight and eloquence.
Lennybhoy,
Thanks. And thanks for any other birthday wishes I’ve misssed tonight. It’s been a good day – and we have so much more fun yet to enjoy.
Paul, a superb summary of the season off the park so far.
Other people will have said this already, but I am late to the party today so I will just mention it in passing.
Had Craig Whyte asked for ten days’ grace in January to consider administration and used the time to execute a liquidation-and-phoenix plan, what would have prevented HMRC from scuppering him the way they did on February 14?
would be good to see that crest in the Celtic trophy room, marked under “scalps”
Gordon_J
Happy birthday. Life is a great gift.
Questions that the LLL could be asking but aren’t…..
To Stuart Regan
Stuart, whilst you’re inquiry is confidential, can you confirm that the SFA President took no part whatsoever in the consideration of and setting of the terms of reference?
and
Has the SFA ever received more than one contract for any footballer registered and if so did this involve EBTs?
To Mark Hately
Mark, have you at any time ever been the beneficiary of an EBT and if so was that from RFC?
To A McMoist
See Above
To Neil McCann
See Above
To Billy Dodds
See Above
To Fraser Wishart
See Above
To Gordon Smith
See Above
and
Did you ever act for a player as agent and agree an arrangement for an EBT and did this ever involve RFC?
and
Did you ever receive more than one contract per employee of SFA clubs at anytime at the SFA and if so did this involve EBTs?
But, I’m not a professional sports journo so maybe these questions are irrelevant?
HH
Neil canamalar Lennon hunskelper extrordinaire on 1 March, 2012 at 21:59 said:
LOL Bullet point two got lost in the redraft :)
James Forrest 20.47.
Magnificent writing.The truth hurts the hun.HH.
Also on the huddleboard.
I do think we should promote the plus side of them landing in the 3rd division and how good it will be for the majority of Scottish football
It would be a form of community service to see all those away Rangers fans paying to see the other Scottish teams on the way back up
Just think of the improvements their money will achieve for those grounds metaphorically speaking in need of a coat of paint
They cheated and have a moral obligation to pay their dues to the rest of the fabric of Scottish society
TonyG @ 21:58
Ready….. Deady… STOP!
Yours in Celtic,
TB&F.
row z, you should send thatexcellent post to the Herald Letters,
TJ
When the establishment appoint Law Lords to chair Inquiries, be they Public or Private they are chosen because they are seen to have “a safe pair of hands”.
The publicity (spin) that surrounds such appointments however portrays the exact opposite.
Cast your mind back a few years to Lord Fraser of Carmylie (like Nimmo-Smith a Spec member) before he began the Inquiry into the Holyrood Parliament fiasco when building costs had escalated from an initial £40 million to the eventual £450 million.
I can remember Fraser posing on camera, thumping his fist down on the desk and acting the tough man who would order anyone he wanted to appear and God help those who would thwart his quest for the truth.
Years later and after what seemed like a hundred nightly television sessions of evidence the Fraser Inquiry blamed…………………………well nobody.
The only hope with Nimmo-Smith is that he is now retired and would want to be remembered for his last gig and not his first one…….The Magic Circle Inquiry.
Let’s hope he wants to go out on a high, with all guns blazing, but the signs are not good.
There demise is jokingly put down to Catholic Schools or Neil Lennon. Or HMRC’s fault. However, my good friend remarked to me a while back maybe it was Jock Stein’s fault. As I ponder what he meant, it dawned on me and can understand why. What Jock and the Lions did on 25th May 1967 may have been the catalyst to them taking themselves to the brink of oblivion by trying to emulate what we have done.
Oh and in case it needs pointing out, which I’m sure it doesn’t, they are on the brink of never, never ever being able to do what we did. A line in an immortal song…and we will never be defeated…
Keep the Faith!
Hail Hail!
row z \o/ (O) whatever part of my club is dependent on rangers I am willing to lose! on 1 March, 2012 at 22:08 said:
—————————-
To the PFA Were you aware of any of your members being- beneficiarys of an EBT
Celtic_First,
Thank you. I’ve learned that one the hard way.
There’s a man I meet
Walks up their street
He hasn’t paid the Council
He hasn’t for many years
And he takes no calls off nobody
He sent his club into the gutter
He’s put them in admin
And barely ever mutters
And He packed his bag and went to France
He sold his staff a bogie
A supposed billionaire?
Well so the Daily record told me
He’s not let out the secret
About the money in his kitty
But soon HIS wealth’ll double
cause he’s got no dignity!!!
He was sailing down the west coast
Thru villages and towns
he was on his holidays
Whilst his club is on the scrounge
They’ll ask him how he bought them
He’ll say ‘i used THEIR MONEY
I know that’s pretty shitty
But i’ve GOT NO DIGNITY”!!
The telling of this story
It may sound obscene
They were believing all his guff
And now they’re on their knees
and soon they’ll have no home
For living beyond their means
Its gonna be a cold winter
They’ve GOT NO DIGNITY.
He went sailing down the west coast
Thru villages and towns
he was on his holidays
Whilst his club is on the scrounge
They’ll ask him how he bought them
He’ll say ‘i used THEIR MONEY
I know that’s pretty shitty
But i’ve GOT NO DIGNITY”!!
he Set you up set you up set you up set you up set you up set you up
ha ha set you up again set you up again set you up again set you up again
Set you up set you up set you up set you up set you up set you up
Yeah set you up again set you up again set you up again set you up again
And we know they’ve got no home
And they’ve never had our faith
now they’re thinking about work
An we’re thinking
How good it would be
to see them die some day
Cause they had no Dignity
They had no Dignity
They’re Shi*e
monteblanco on 1 March, 2012 at 21:55 said: the spl, i suspect would revert to the protect the few its what they do, just listening to them highlights their lack of insight, head in sand extends further than goven all the way over to the south side.
Enrico Dandolo nicked my Crusade on 1 March, 2012 at 22:00 said: parking the bus is what most all teams do and after celtic score, for example, they try to come out a bit more, from my perspective it would force team to come out and play because 1 points for a no score draw would suit no one.
the best team will tend to win
the negative defensive tactics would have to change and lets be honest we all go to watch games and goals
Maisy Dribble…spot on….we need to ignore Traynor et al…….we’re not giving them one penny until we are sure the game is on……..we should actually bhoycott it…..LOL…!!!!
Talk about ‘biscuit tin’ ……..this isnae real……..what a laugh, and what a mess their ‘knight’ has got them into……and as for cw……..what a wee ace he is !!
Listening to some phone-ins over the last couple of days and it is amazing that the Ragers situation is portayed by some of their fans as an opportunity to progress into English Premiership.
They show themselves to be so bereft of any morality that the first thing that they think of is that their cheating, lying, and robbing of the country and other clubs should be a chance to move onwards and upwards.
People give up drink for Lent (or January) so they can hammer it before and after. Or to convince themselves they don’t really have a drink problem.
Paul & JF
Fantastic articles which sum up the mood.
But Paul I must disagree with the individual formerly known as MBB’s motives.
The big tax case I believe would have always caused them to be liquidated and Whyte banked this. His actions with Ticketus from the get go was short term ism in the extreme and unsustainable. As you state FPLG blew the budget with Euro failure and the tax case delay upset the plan but I honestly believe he was in it simply to turn a coin and move on.
The business is losing millions and there was never any other investor.
Whyte will ensure that Ticketus will get rights to ground etc and move on.
JF
Great point re admission to SFL never mind Europe but they will bend the rules although I think even most of them doubt them SPL parachute.
You are right about it being dangerous times and any new Hunco will be a
lightning rod for all fascist bigots and white Protestant supremacy than ever before.
Wonder if there is any where we could get a look at Nimmo Smiths record for inquiery results, has he ever found anyone responsible for anything
Paul67, I follow your logic. Next step for me is new buyers being tarted about a la the Rangers sign Euro ace headlines we are no longer used to. I see another ‘face’ in Rangers short future.
Who does Walter Smith favour?
Tony G
Aye Surrendered (and so did my wife) 2012.
Back at ya………..
HH
Salmond and SNP make me want to vomit! What exactly are they going to do for Dunfermline? The meeting is just to start canvassing for Newco rangers coming straight into the SPL.
One Nation…
TJ
Think it would remain ‘unpublished’ ;-)
HH
Great post from James.
you are all a bunch of fools…
you all have short memories…
REMEMBER Craig Whyte has a plan for EVERY eventuality!!!!
…or maybe he’s telling lies :-)
Bhoys any of you read the Blanketmen book?
Ceaser67 : Any macaroon bar they sell will be vastly inferior to Mr Lee’s wonderful product. :)
ggh
Auldheid
I know the club can’t say anything until the FTT delivers it’s verdict.
If they are found not guilty the club will say nothing.
If they are guilty, the club have a problem, do they go for the jugular, or do they let things ride for a time to see things pan out.
In all honesty it’s not a good situation to be in.
Personally I favour going for the jugular, they will have been seen to cheat all of scottish football, they will have taken their place in euro comps under false pretences.
They will have stolen countless millions from our club.
They will have stolen millions from uefa.
They will have stolen millions form other scottish clubs.
They will have gained millions of sponsorship under false pretences.
Etc.Etc.
I want them gone.
Exiled Tim
Paul sent you my email.